The White House brushed off concerns that a dip in gross domestic product in the first quarter of the year and surging prices are worrying indicators for the U.S. economy as trade slows around the world.
“Our economists and our economic team continue to feel confident in the strength of the economy, even as we monitor a range of data,” press secretary Jen Psaki said.
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Consumer spending and business investment are up, Psaki noted. “The decrease as it relates to exports is largely because our economy is stronger than many economies around the world.”
She attributed the slowdown mainly to “technical reasons” in remarks earlier in the week.
The Federal Reserve’s preferred measure of core inflation, the personal consumption expenditures price index, jumped 6.6% year over year, the Commerce Department reported Friday, the highest increase since January 1982.
And while inflation has surged, the economy contracted 1.4% in the last quarter, economic conditions that have led to periods of so-called stagflation when government actions to control rising prices have exacerbated unemployment.
Austan Goolsbee, a former chairman of the Council of Economic Advisers during the Obama administration, said Friday on Fox News that President Joe Biden’s response to the economic contraction appeared to “underplay” some of the risks and noted slowing trade with Russia.
The high cost of gas and groceries has eaten into people’s pocketbooks, leading many to worry about where the economy is headed.
According to a recent Associated Press/NORC poll, 70% percent of voters said they believed the economy was faring poorly, compared with 29% who said it was doing well.
Many are pointing the finger at Biden. Sixty-six percent of voters said they disapproved of Biden’s handling of economic issues, up from 42% this time last year, according to the April survey.
The White House has remained circumspect despite this. On Thursday, Biden assured reporters that he was “not concerned about a recession.” The president also noted that the unemployment rate is also at its lowest number since 1970.
Later, he praised small-business owners who he said were driving the country’s economic recovery.
But despite the president’s efforts to calm the waters, outside experts are raising the alarm.
In a Washington Post op-ed last month, former Treasury Secretary of the Treasury Larry Summers warned that the Fed was charting a path to stagflation “and ultimately to a major recession.”
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Earlier this week, Biden’s labor secretary acknowledged this very possibility.
“It is a real likelihood,” Marty Walsh said during an interview with Poppy Harlow when asked whether an economic recession could be on the horizon.
